Sole traders do not lawfully need to own the bank account of the business, but there are various benefits for owning a business bank account such as having personal finances and distinct business. In the blog, we discuss why you require or need to open the business bank account.
Do I require a bank account for business?
If you are the owner of a sole proprietorship firm, then it is not necessary for you to have a distinct bank account of the business. However, it is recommended, if you apply the following criteria:
- If you are the owner of a limited company, then your business will be defined as a distinct legal entity and you are legally bound to own a bank account for your business.
- You want to receive the payments made via cards from your esteemed customers
- For your business, you wish to own a credit card or if you want to get some business loan
- The expenses and incomes of your businesses is getting very difficult to find and it is extremally difficult for you to correctly file the return of tax.
- Most of the transactions are processed by your business
- You want to file a certificate of incorporation for your business and wants to be a limited company
Why you need a business bank account?
It is recommended that you shall apply for a business bank account, even if you are doing some part time business. You can legally deploy your business bank account or open another personal account for yourself. You need to consider few things before opening the business bank account.
The bank account of your business makes things very simple for the customs and revenues of the HM
During your self-assessed return of the tax, you need to file your business expenses, outgoings and the income. If you merge these numbers with the details of your personal finances then it is very difficult to make sure, that you are calculating total taxable profits in a proper way, If you wish to claim the back permitted expenses.
It is therefore, good for you to open a bank account for your business and carry your returns of tax in a simple way.
Read Also: Do I Require A Self-Assessment Tax Return?
The terms and conditions of your bank might not permit it
If you want to open your personal bank account, then you need to ensure that you have thoroughly examine the conditions and terms before opening the bank account.